This paper aims to explore the role of spillovers in the strategic choice for a MNE in a duopoly model, especially focusing on endogenous FDI spillovers with spillover-prevention costs. After discussing the exogenous spillover case, this paper shows that with a quadratic spillover-prevention cost function, the FDI-performing firm may choose a positive level of spillovers, which is lower than th...

We develop an analytical framework to investigate the competitive implications of personalized pricing (PP), whereby firms charge different prices to different consumers, based on their willingness to pay. We embed personalized pricing in a model of vertical product differentiation, and show how it affects firms’ choices over quality. We show that firms’ optimal pricing strategies with PP may b...

This paper extends the theory of real options, which mainly considers the problem of timing of investment, by letting the firm choose also the quantity produced after the time of investment. Under the conditions of irreversible investment and uncertainty in future demand, the firm can adjust its output quantity at each point in time in the future. Our paper shows that changing the structure of ...

This paper presents a model incorporating endogenous firm entry (or product creation) that successfully translates positive news about the future into current expansions, and accounts for the positive comovements in output, consumption, investment and employment. The key elements are a time-variant sunk entry cost and variable capital utilization. In response to the expectation of future positi...

Why do firms exist? What is their function? What do managers do? What is the role, if any, of social motivation in the market? In this paper, we address these questions with a new theory of the firm which unites some major themes in management, principal-agent theory, and economic sociology. We show that while the market is a superior incentive mechanism, the firm has a comparative advantage wi...

This paper attempts to develop a framework for interrelationships among human resources information systems (HRIS), outsourcing, and corporate culture. This research investigates impacts of outsourcing HRIS on corporate culture. In this paper, we hypothesize that outsourcing corporate HRIS is less appealing (1) if the quality of product and customer service matters for a firm, (2) if a firm is ...

We examine the diffusion of one particular kind of firm strategy, diversification, among a population of Chinese listed firms during the period of 1991 to 2002. The results are consistent with the idea that the decision is driven by both efficiency and legitimacy concerns. By linking diversification to social network and institutionalism theory, this study sheds new light on how dissemination a...

Standard economic theories of the firm (and other organizations) stress profit maximization as the foundation for derivation of predictable behavior. Yet statistical and case-study evidence continues to accumulate that real firms do not act as required by the neoclassical framework. Instead of being represented by ever more elaborate maximization models, the firm can be modeled simply as a netw...

We study the stylized problem of a multi-product firm that can revise prices only after paying a fixed “menu” cost. The key assumption, introduced by Lach and Tsiddon (1996, 2007) and Midrigan (2007, 2009), is that once the menu cost is paid the firm can adjust the price of all its products. The firm’s problem is to minimize the deviations of the profits incurred relative to the flexible price ...

a r t i c l e i n f o Using event study methodology and two-stage regression analysis on a sample of firms announcing human resource outsourcing (HRO) contracts, this study tests the association between administrative HRO and firm-level capital market and long run operating performance, with archival financial data controlling for endogeneity and outsourcing decision optimality. The results dem...